IP Law Daily Polish video streamer infringed U.S. distributor’s copyrights; liable for $3M in damages
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Monday, March 5, 2018

Polish video streamer infringed U.S. distributor’s copyrights; liable for $3M in damages

By Thomas Long, J.D.

Polish public television network Telewizja Polska, S.A. ("TVP)" infringed copyrights held by content distributor Spanski Enterprises, Inc. ("SEI") by making 51 SEI-copyrighted television shows available for viewing in the United States via Internet streaming, the U.S. Court of Appeals in Washington, D.C., has determined, affirming a district court decisionissued in December 2016. SEI was the exclusive licensee and owner of valid copyrights over the shows, with the exclusive right to distribute and display the programming throughout North and South America. By uploading copyrighted content to its website in Poland and making that content available on computer screens in the United States at users’ request, TVP committed actionable domestic violations of the Copyright Act. SEI also showed that TVP’s infringement was volitional and intentional, and not caused by a failure of its website’s geoblocking system. The appellate court also affirmed the district court’s award of statutory damages of $60,000 per episode, for a total of $3,060,000 (Spanski Enterprises, Inc. v. Telewizja Polska, S.A., March 2, 2018, Tatel, D.).

Programming at issue. TVP owned and operated 12 national and 16 regional Polish-language TV channels, including the channel TVP Polonia. TVP distributed content, including TVP Polonia shows, via a video-on-demand feature on its website at www.tvp.pl in Poland. Some content was offered for free; some on a pay-per-view basis. Although TVP created all TVP Polonia content and owned copyrights in the material, it licensed some of the content to other distributors, including SEI. Canada-based SEI distributed Polish-language TV and radio programs in North and South America via satellite, cable TV, and the Internet.

License agreement. On December 14, 1994, the parties entered into a license agreement granting SEI the exclusive right to one-time use of TVP Polonia shows in its programming in North and South America ("the Territory"). A 1999 addendum gave SEI the exclusive right to distribute, broadcast, and display the content over the Internet in the Territory. A 2009 agreement settling litigation between the parties in the Southern District of New York specified that SEI had the exclusive right to distribute, broadcast, perform, and display TVP Polonia content, including over the Internet and mobile devices, in the United States. In 2012, SEI obtained U.S. copyright registrations for 51 separate TVP Polonia episodes.

Geoblocking. TVP used a geoblocking system to prevent user access in the Territory to on-demand programming offered on its website. Two groups of TV Polska employees were responsible for ensuring that each episode uploaded to the website was programmed to include the appropriate territorial restrictions. During the relevant time period, the default territorial access setting assigned to each TVP Polonia episode in the content management system was "minus America," meaning that the system blocked access in the Territory by default, unless a program editor affirmatively selected a different instruction from a drop-down menu.

Infringement. SEI’s president, its attorney, and a website development and monitoring contractor all testified that they were able to access TVP content via TVP’s website—including the registered TV Polonia episodes—in Canada and the United States on a number of occasions between December 2011 and March 2012. The witnesses testified that they did not attempt to circumvent TVP’s geoblocking, and SEI presented no evidence that they had made such attempts. The district court found that SEI established by a preponderance of evidence that the 51 SEI-copyrighted episodes were available and viewed in the United States via TVP’s site. The episodes were made available by TVP employees removing the episodes’ default "minus America" territorial restriction and creating non-geoblocked digital formats of the episodes. This conduct constituted infringement of SEI’s public performance right under the Copyright Act, the district court concluded.

Volitional and willful conduct. The district court found that TVP acted volitionally in infringing SEI’s copyrights because, since the SEI witnesses actually viewed TVP Polonia content in the United States, it followed that TVP employees must have taken the required volitional actions to remove territorial restrictions. In addition, screenshots of the TVP workflow system showed that TVP routinely made copies of shows in multiple formats, including one with no territorial restriction. There also was evidence that TVP employees had removed geoblocked episodes from distribution, manipulated workflow logs, and then republished the episodes in unrestricted format.

On appeal, TVP argued that the district court clearly erred in finding that its employees "must have volitionally acted to remove territorial restrictions from the 51 Episodes." The only support for its contention that that TVP offered was evidence that some of the episodes at issue had been uploaded in both geoblocked and non-geoblocked formats and that several of the non-geoblocked formats were created only after the period of infringement. In the appellate court’s view, these "isolated points" were nowhere near sufficient to undermine the district court’s factual findings, which rested on record evidence that the 51 episodes had been viewed in the United States and Canada via the TV Polska website,

Public performance. Before the appellate court, TVP contended that maintaining a fully automated video-on-demand service could not constitute a copyright violation because the end user—who ultimately selected which content to view—was alone liable for any infringement. The court rejected this argument because the Copyright Act’s provision on the exclusive right of public performance did not state that an audiovisual work that was "transmitted or otherwise communicated" was performed only if a third-party end user played no role in the showing. TVP showed the 51 works to the public through its website, and this was sufficient to violate SEI’s public performance right. Moreover, TVP’s position contradicted the holding of the Supreme Court in American Broadcasting Cos. v. Aereo, Inc., 134 S. Ct. 2498 (2014). In Aereo, the Court held that Aereo’s service—which, at a user’s request, directed antennae to capture broadcast television signals and retransmit them over the Internet to the user’s computer—infringed the television broadcasters’ public performance rights under the Copyright Act. The Court explained that an intermediary such as Aereo publicly performed even when its conduct consisted only of capturing and retransmitting a broadcast "in automatic response" to an end user’s request. Further, the D.C. Circuit observed that TVP played a more active role in performing infringing content than did Aereo, since TVP transmitted copyrighted episodes purposely selected and uploaded by the system operator.

Extraterritoriality. TVP also argued that, even if it did infringe SEI’s copyright, holding it liable for that infringement would constitute an impermissible extraterritorial application of the Copyright Act because it did nothing in the United States. Whether an infringing performance that originated abroad but that ultimately reached viewers in the United States can be actionable under the Copyright Act was a question of first impression in the federal appellate courts, the court said.

The court noted that the purpose of the Act was to grant copyright holders several exclusive rights, including the public performance right. In this case, although TVP uploaded and digitally formatted the 51 episodes in Poland, the infringing public performance occurred on computer screens in the United States. Because the conduct relevant to the statute’s focus happened in the United States, the case involved a permissible domestic application of the Act, even if other conduct occurred abroad.

Damages. Given TVP’s willful infringement, its prior history of infringing SEI copyrights, its "intentional manipulation" of evidence, the lack of evidence (due in part to TVP’s conduct) necessary to determine actual damages, and the need for deterrence, the district court decided that $60,000 per episode infringed was reasonable, for a total damages award of $3,060,000. TVP challenged both the willfulness finding and the finding as to the number of episodes it infringed. The appellate court rejected both challenges.

The district court’s decision on willfulness was supported by sufficient evidence, the D.C. Circuit said. The district court had found that TVP deliberately removed geoblocking from the 51 episodes, was aware of SEI’s exclusive right to broadcast them in the Territory, and took purposeful steps to hide its misconduct. With respect to the number of infringements, TVP conceded that 36 of the 51 episodes were viewed in the U.S. but argued that the remaining 15 were not. The district court had based its finding principally on the testimony of one of SEI’s attorneys, who kept a contemporaneous log of the episodes—including the 51 at issue here—he had viewed on the TV Polska website. This testimony, along with other evidence, including contemporaneous screenshots from the TV Polska website and testimony from one of SEI’s contractors, was sufficient to support the district court’s conclusion. Therefore, the appellate court affirmed as to both liability and damages.

The case is No. 17-7051.

Attorneys: Walter Earl Steimel, Jr. (The Steimel Law Group) for Spanski Enterprises, Inc. Andrew Lawrence Deutsch (DLA Piper LLP) for Telewizja Polska, S.A.

Companies: Spanski Enterprises, Inc.; Telewizja Polska, S.A.

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